Costa Makes Daring Move To Asia

March 6, 2006

In its most outrageous and daring new itinerary announcement since it discovered the New World (a.k.a. the Caribbean) Costa is launching an Asia-based cruise operation. Beginning in July, CostaAllegra will be assigned to the homeport of Shanghai, where it will sail five night roundtrips that call at places like Nagasaki, Japan, and Cheju, Korea.

But here's the rub: These cruises will neither be marketed nor available to Costa's normal clientele (Europeans, North Americans, South Americans). And it's certainly not a region that Costa, which specializes in Europe, the Caribbean and South America, normally offers its own passengers.

Indeed, what's significant about the move of the 28,500-ton, 1,000-passenger CostaAllegra to Asia is that Carnival Corporation becomes the first major U.S.-based cruise company to establish an Asian presence (editor's note: there are a handful of American lines that operate river cruises in the region, particularly in China, such as Viking River and Victoria Cruises). Others simply offer seasonal cruises in Asia -- ranging from Oceania Cruises to Holland America and beyond.

But Costa's move, representing the first significant foray into Asia for Carnival Corp., its parent company, is quite different. According to the cruise line's statement, Costa was chosen instead of, perhaps, Carnival or Holland America, Seabourn or Princess, because Pier Luigi Foschi, its chairman and CEO, has extensive experience working in Asia.

Costa has already created a new division in the company, called Costa Asia, and its offices in Hong Kong and Shanghai will open in April. In May, Costa Asia will open a call center in mainland China.

While all the bother? Asia -- and China in particular -- is indisputably one of the world's fastest growing travel markets. The 31 million Chinese, for instance, who traveled abroad last year are expected to jump to 50 million by 2010. A statement from Carnival Corp. head Micky Arison notes that "this region could be the next great growth areas for cruising."

Tell that to the folks at Star Cruises. This Malaysia-based cruise line owns roughly about 50 percent of the Far Eastern domestic market. And not so conceptually, the five-ship line already has expanded onto Carnival territory with the acquisition, in 2000, of Miami-based Norwegian Cruise Line. Star Cruises is currently benefiting from the company's strong drive to upgrade all of its NCL ships -- while sending its only slightly middle-aged vessels, once they're retired, to Asia, where they join the Star Cruises fleet.